House Republicans propose $3.8 trillion budget that would boost defense, cut social programs

WASHINGTON — House Republicans launched a boldly conservative 10-year budget plan Tuesday that would favor the Pentagon, partially privatize Medicare and rely on deep cuts in other social programs to help wipe out deficits at the end of a decade.

A little more than four months after winning their largest majority in 70 years, Republicans promised an overhaul of the federal tax code and called for repeal of two of the top legislative achievements of President Obama’s tenure in office. Those are the Affordable Care Act and a measure enacted to crack down on Wall Street after the economy’s near-collapse in 2008.

Republicans said their balanced-budget promise comes with no tax increases, though the fine print assumes the expiration of about $900 billion in breaks for business research and development and other items.

“The new normal of slow economic growth and low expectations is unacceptable. We know we can do better,” said the House Budget Committee, chaired by Rep. Tom Price of Georgia, in a report accompanying the proposal.

It promised “greater prosperity, opportunity, security and freedom” if enacted.

Projected spending for the budget year that begins on Oct. 1 was $3.8 trillion, rising to $5 trillion in 2025.

Obama countered Republicans’ claims instantly. He said the prescription “is a failure to invest in education, infrastructure and national defense – all the things we need to grow, to create jobs, to stay at the forefront of innovation and to keep our country safe.”

The president’s own budget calls for about $2 trillion over 10 years in higher taxes on corporations, wealthy individuals and smokers of all income levels as part of a plan to increase spending and give tax breaks to the middle class.

Rhetoric aside, the release of the tax and spending plan in the House begins a rite of spring.

Senate Republicans intend to outline their own plan on Wednesday, and each house is expected to ratify its own version next week.

After that comes the harder challenge of forging a compromise between the two versions, a task that Republicans acknowledge will mark a test of their ability to govern now that they control both houses of Congress.

An even more difficult challenge follows, the translation of policy objectives into legislation that would be sent to Obama to sign or – more likely – veto. The budget also is certain to become an issue in the still-early race for the White House in 2016.

The House budget relies heavily in some areas on previous plans put together by Price’s predecessor as committee chairman, Rep. Paul Ryan of Wisconsin.

It also adapts to changing political circumstances, most notably by offsetting a looming automatic budget cut in national security accounts.

The proposal would allow spending in the coming budget year of $36 billion more than Obama recommended for overseas military and diplomatic efforts.

Less than half of the $36 billion would be guaranteed, and the rest would depend on offsetting spending cuts elsewhere in the budget.

Some Republicans and outside groups bristled at the prospect of so large an increase, tucked into the budget in an account for overseas operations that is not subject to spending caps designed to hold down deficits.

“I’m tired of seeing gimmicks in the budget process,” said Rep. Justin Amash of Michigan, a conservative and frequent critic of his party’s leadership.

At the same time, the added funds could gain support for the budget from pro-Pentagon lawmakers for whom military spending is a top priority.

As in prior budgets, the House Republican budget calls for transforming Medicare into a voucher-like program for seniors who join the health care program beginning in 2024. They would receive subsidies to buy coverage, a step that Democrats say would effectively end the current guarantee of services pegged to a pre-determined level.

In all, Republicans said they would cut spending by nearly $5.5 trillion over the next decade.

By far the largest portion of that, $2 trillion, would come from repeal of the health care law that the administration said last week has meant coverage for 16.4 million previously uninsured people. Republicans pledge a replacement, but so far have offered no specifics.

An additional $900 billion would come from other health care programs including Medicaid, which provides health care for the low-income. As in prior years, Republicans proposed transforming Medicaid and food stamps into state-run programs that receive lump sum funding from the U.S. Treasury.

An estimated $1 trillion in savings would come from other benefit programs, but the committee detailed none of them.

Much of the balance of the savings would be derived from general government programs that have borne the brunt of other deficit-cutting efforts in recent years, and from lower interest costs resulting from a decline in projected deficits.

Yet Republicans also estimated an additional $147 billion in tax revenues if their policies were enacted, an amount that allows them to project modest surpluses in 2024 and 2025.

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